so gay because obama's reelection the dependency of the world and particularly the russian economy on the condition of the dollar and last but not least. in the near future the united states plans to reduce its enormous budget deficit to a sixth present level experts generally agree the manager would cause a painful slowdown to the world's biggest economy which would reflect on all the countries like brazil china and russia not to mention financially unstable europe as for russia it still depends on volatile oil prices they're relatively high at the moment but year after year the country misses massive sums of money that businesses take out on the domestic economy this is a serious headache for russian economic regulators. so this is political spoiler mr bellicose and welcome to the show first off like

everybody else you've probably followed us elections actually the whole world follows us elections every four years has always been a mystery to me it's almost as if this is the world cup finals isn't just because of the show these two do people around the world really feel that the outcome of elections will have a big impact on them economically your comparison with the world cup final is actually very good because only two countries are playing but the whole world is watching it is probably because of the show. is a show but it's a very interesting show because you're under any illusion that the outcome will have a big impact on you but actually russia and russia's economic policies or less dependent on the outcome of the elections then it may seem it is this is only true about russia i don't think i can speak on behalf of the whole world will do you think i think u.s. economic policies with respect to other countries and their policies with respect to the u.s. do not depend that much on who is the president of the united states last

president's day depend on other more fundamental factors wall street supported romy during the election campaign there were fears about reelection would result in the dip recession more and the pessimistic outlook in a report by spotlight. during his election campaign obama pointed at the stade you do slow economic growth in his previous four years in office wall street remained unconvinced when its bets on romney the result of the election eventually made stocks for the most in the year would worries wall street is the so-called fiscal cliff reason taxes and cutting government spending planned for two thousand and thirteen investors fear the measures could send the economy back into recession . there's also the issue of ever growing u.s. government debt which has already reached sixteen trillion. it's hardly going to be reduced if obama sticks to the polls to fly didn't the economy with money the u.s.

dollar mission since two thousand and eight his amounted to more than two trillion season obama prompted recession two thousand and thirteen come accompanied by news of the aggravating the economic situation in europe the risk of greece going bust reports of germany's economy suffering as well as the e.u.'s prediction of a decline for the seventeen nations that use the euro currency all of that leads to the speculation of whether or not the global recession is looming. it is always seem that obama's reelection means that the us will continue printing dollars at least many of obama's opponents still people if you relax him he will continue doing that he will once again give the printing presses running could you please offer a layman's explanation of why it is dangerous i mean he kept printing dollars of the first four years in these help to overcome the crisis. well i think

consequences will be about the same as before increasing money supply without going into expanding as both positive and negative effects the economic policy of the obama administration during the first term proved to be an effective way of countering the crisis whether it could be even more effective is anybody's guess but one thing is certain there have been some positive results in these positive results i think they will continue with their economic policies for a school how many years can you go on printing money like that's i think the sunni works for a limited period of time it works over a limited period of time to places like antibiotics you can't take them forever zack lee eventually you will develop an addiction and you can't rely on this method forever. again i can't talk about the use of can i make policies how effective it will be or how long it will continue but i guess once the current policy. konami growth sufficiently the u.s. will start creating less money some people say that now that obama has been

reelected she will finally repeal the jackson veni commitment many of our russian guests have told me that actually this amendment is not events may have a problem for them only creates problems for americans is that true if it creates problems for americans so it creates problems for us as well the current level of troops between the u.s. the world's biggest economy and russia the world's sixth biggest economies terrible little compared to the potential of countries have of course this amendment is a problem many conversations with the us companies in this year i do some admin has a big impact on their operations so is this amendment effective is effective unfortunately and it's unfortunate it's a problem for americans but it's a problem for us as well because it stops us from attracting foreign investment and developing ties with the u.s. companies even though we have to have a good number of u.s. companies working in russia because like you said you can speak on behalf of us administration but we'll be repealed amendment during the i think so you think so yes but i think he said he would all our consultations with our counterparts from

the u.s. administration seem to point this way of course this is also a question of who controls the house and the senate the democrats have retain control over the senate so i think there's a good chance it will be repealed. there nobody needs it. it creates problems for everybody. it's going to what about foreign debt assumes that russia and the us have a totally different concept of foreign debt but supposedly we did our best to get rid of all foreign debts the first one we could afford it and many people criticized this decision is unnecessary americans on the contrary have the four and a growing bigger and bigger every yes is it possible to have the four and a growing indefinitely. can grow indefinitely of course it's just a matter of the effects will have on the economy such dependencies likely to have a serious effect on the country in terms of how attractive it is to. asters. i was in atlanta recently and many years business men told me that they beat at russia's

macroeconomic indicators our problem of course is that because of our underdeveloped institutions we don't make use of this macroeconomic stability we just potentially huge advantage but i was in their situation is different they compensate for their macro economic disparity with their business environment. and you're an economist you're also a deputy minister the you may be wrong but i think that foreign debt is a political instrument he used to think i want to fuel a lot of money to some country this country depends on you not vice versa reuters going to yeah are you talking about china i think it's a little necessarily no let's say a bar a lot of money from you you will treat me very carefully because if something happens to me you'll never get your money back it's not just the political instruments this is second period merrily it is an economic instrument of course you borrow money to finance your projects finance your priorities finance your economy. you also make that country dependent on your economy then am interested to

see you do well yes there are interested people otherwise they don't get their money back this is why i said at the beginning that it doesn't really matter who is the president of the united states the world economy and the u.s. economy very interrelated a few days ago view or being commision for cost for europe's strongest economy germany by hoff do you think russia will suffer a major setback if the strongest economies in the euro zone crisis as well. these little watching the political will i would rephrase this question if on me yes please how much does the russian economy depend on the condition of the world economy the u.s. economy actually we have covered that and the eurozone economy of course it depends on them the world is going global the economy's gone global zero sum games are long gone and. they have nothing to do with the economic policies anyway of course will

suffer a setback a few faces a crisis we genuinely hope that the crisis does not affect the european union that much with even though they have a crisis right now still so i would hate to see the crisis develop in the european economy but our economy's pretty stable it doesn't actually depend on the european economy and that much. stability is based first on immense domestic demand second in addition to european markets we have access to grow asian markets were economies unlike in europe even though there are some slowdown asia is still grown and its growth pretty fast so we don't depend on the europe that much. as we knew it was a perhaps another reason we doing depend on europe that much is because unlike western europe our economies based primarily on fuel exports. there's a lot that's wind up the rates based on different principles but this on the

contrary is what makes us more dependancies our fuel exports go primarily to your europe including tourney's one of our biggest clients their worst their economic situation is the last demand they have for our fuels that are supports we have long term contracts that protect us from economic downturns but on the whole this is not so good but the biggest factor in that makes the russian economy less dependent or more stable is that it is primarily driven by domestic demand. was. the bank of russia olson minutes for cost a few days ago but seeing capital flight in russia will be worse than expected earlier they think it's really meant to set sixty seven billion us dollars this year is about one of your interviews you actually mentioned an even bigger man's eighty four billion years told us why does money flee russia and where does it go. a lot of the forecast by the economic development ministry is actually fifty five

to sixty billion dollars a year where does the money go this is goes to other countries that are just part of what some of the money that leaves russia is later vested in russia through offshore jurisdictions which but anyway we're not happy with this capital outflow of course the reason behind this kept so i'll close obviously because unfortunately the investment climate in russia is not as good as we'd like to think of it a little bit is that shelby another reason is sort of what it is safe for it to move your capital too in or short territory and then vested in russia is cool and the third reason is that that because of the crisis because investors tend to keep their capital rather than in the west it will put by the economies are shrinking demand is falling g.d.p.'s falling or at least not growing yes weakly as it used to in economies are unable to digest the capital available to them so investors prefer to keep their capital that's why in two thousand and eight and two thousand and nine during the first wave of the crisis many european companies withdrew the money they made in russia back to the e.u. and u.s.

companies would through their money back to the u.s. and banks did the same to they had instructions to transfer their funds abroad that and so this was due to the crisis plus the fifty's says soon a good video call from russian deputy minister all because i'm a devout spotlight will be back shortly iran operates out.

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. could you take three months for charges three arrangement free. free. free. download free broadcast video for your media project a freebie deodato party dot com. welcome back to spotlight i'm al gore and often just to remind you that my guest on the show today is sygate cough russian deputy minister of economic development.

if you are saying that the russian economy and eastern economies in general a more stable today than the western ones so why didn't invest does invest them money he would say where economies more stable as well as any station. russia chinaman go to you name it it's obvious that the russian economy for example can provide a high return rate in this sense we're doing fine and russia's return rate is so one of the highest in the world but on the other hand there are certain risks in russia but i don't mean political or economic it's just the lack of proper institutions of irish skill in this sense investors face certain risks here and yes they can get a return on their investment pretty quickly but at the same time they have some risks but they look so the economic policies of the russian government including the economic development ministry it is hard to minimize these risks you mentioned that sometimes it is in russian money being green vested in brush. here russian

politicians talk about increasing investment in russia well i suspect that those unknown actually foreign investments of car this if i think it is russian money taken out of the country and then i reinvest it here you've got there is a true. it does this mean those figures all deceitful. no they're not just it will . present their of course but let me ask you what i mean by russian money money is money whether it's russian or not at the universe someone takes his money out of russia it is our job to do all we can so he at least reinvest his money in russia leader of course i don't like the idea of doing business through all short companies but i strongly oppose the idea over strict movement of capital we drop those restrictions in two thousand and seven and even the prices do not force us to reintroduce them even though many experts including foreign ones actually recommended that we do that was that we set up some barriers to stop the capital side because it was obvious that during the crisis investors would withdraw their funds from the economy and keep them elsewhere you know we decided against it

because other part of the reason the figures for capital outflow seem to use the term capital outflow because i don't like the term capital flight part of the reason is because of what i just said but this was our deliberate choice we have liberalized capital movement and we're not going to introduce any restrictions at this point on that but you're right it's such a thing does happen still most of investments in russia are genuine foreign direct investments you say don't like the wood flux that says sixty seven to seventy billion used elysium doesn't sound like likes you what kind of figure would represent flights using that we use the term outflow so that when does outflow turn into flights because it depends on the overall immense you'll intensity. when you have capital flight you don't have kept inflow but it seems to capital flight is a one way streets of course the capital flight is when nobody wants to invest in the country anymore but in our case we have an investment coming to russia of course i may be biased here but this is not just my opinion so you are seeing that

as long as this is a two way street it is just capital movements yes it's kept all movement even the fact that people arena best their money after moving them abroad. in a case that our economy attracts them but foreign companies also invest in russia so they did this even during the crisis they built their factories here they show with their money that the russian economy is attractive but of course our potential in russia is much greater than the current level. so it is our job to attract even more capital. city how would you estimate they were all investments in rushing two thousand and twelve. well we had a fifty two point nine billion dollars in foreign direct investment in twenty eleven so i hope it will remain at approximately the same level this year. that's essentially commensurately with lot of well strictly speaking outflows greater but i mean the gap is not the big fifteen to seventeen billion right but

even more importantly foreign investment is more than just money it is also new competencies new technologies coming to russia that's why it is so crucial i mention the figure of fifty two billion dollars i can say that we need at least seventy five to eighty billion dollars in foreign investment which out how did you get this figure seventy five billion this is what experts say this is how much foreign investment we need this reminds me of one russian book with one guy asks another sure how much money do you need to be perfectly happy and the other guy's replies three rubies come along you can do better than that's in that case i need a hundred roubles so why seventy five billion is how did you get this figure actually there is a way to come up with a pretty accurate estimate of how much money an economy needs i mean this is how much we lack yes this is how much we need to build infrastructure to modernize our production facilities. and this is a much we need every year. yes these are annual direct investments not just part fall in this you mention that russia has

a good rate treats and make it attractive to investors we need to minimize some risks of those risks for many things one of the things they always mention. the court system to do it they complained it's impossible to achieve anything in court in russia some are still one of the biggest risks for news face in russia today in your opinion. we can talk about ports leader you know what i hear from foreigners is slightly different their biggest concern is that there are no clear rules when they come to russia. they want a clear set of rules yes they want to clear set of rules because on the one hand they see laws that set forth those rules and set the playing field where they were going to implement their projects and they're happy with these legal and financial terms in other words russian legislation is fine with them it is quite competitive for example our taxes are relatively low what they have problems with is how these

rules are applied in practice the fact that they're not uniformly applied creates uncertainty so that when the most important thing for capital stability. will show uncertainty or the greatest risk it's serious to be talking about stability and really we all know that the best place to get fish is in the muddy waters every businessman will tell you that's the muddy water is the best place. to go is no the kind of business people that die talk to don't enjoy doing business in muddy water. they're willing to engage in competition but they want this competition to be clear in transparent it's and they don't want rules to change after they commit it to a project that i thought you know a few words about before it's. you know there is this company or their c.e.o.'s name is. klein philip that well i think this was last year at the

meeting o'barry consultative council for foreign investment. mr kleinfeld said unfortunately we meaning both his company specifically and businesses in general unfortunately we don't use courts enough for the but he said we prefer to settle our disputes outside the courts see you mean in russia at the pool but yes in russia answer to that and that's better because this is the moderates the court system and it doesn't develop this to moderates businesses and individuals and they don't go to court to resolve their disputes and he spews will always be there no matter how excellent your economies he will always have disputes and that's what you have arbitration courts for was just a general of the court system in general and especially arbitration courts are being reformed in are becoming more transparent ineffective a step that i see in the foreign companies also say so. they don't always trust the

court system but that's because there is some inertia in what they think the systems effectiveness. you are saying that russian courts are actually think they have a bent reputation and that's what russia needs to work. you think cool sorry think of enough as they are. well i think it would be overly optimistic to say our courts are already effective enough. with the arbitration courts are definitely improving record hearings are open the results are frankly published and the reason transparency is so important is because when you have transparency it could decide the difficult for drawing people to give on a fair rulings the same process. but of course there is room for him. issue. you mentioned return rates there apart from. what else the tricks

for in this in russia. they know that if they build a production facility in russia they will always be able to sell their products year but we're not just talking about a boy tensional market with a hundred forty million people it's a big market and these people can pay some criticize us for spending too much in our social programs not that that's the reason why even during the crisis of two thousand and eight two thousand and ten we had disposable incomes growing and these are not just incomes these are disposable income which people can spend on goods produced here in russia of course this present. in the budget was because early out there was to finally give mention that foreigners encourage each other to resolve disputes seem cool to have your in quotes. this is them encourages businesspeople to resolve their disputes informally because they live with this is wrong you say it business but if businesses are actually happy with the way this system where it's far more and if i going to find this precious use them anyway i

might still sort of double so but i'm still yes i will fight the system that encourages people to resolve their disputes informally we have been consistently simplifying the procedure so you don't have to go through a lot of trouble when going to court it should be simple enough so that you're not tempted to bypass it and use some other way say bribe somebody which. is a bribe so you pay for a service then you should be able to get it anyway but it's just that this service is extremely difficult to get paid a bribe to scramble for them. thank you thank you very much for being with us and just a reminder that my guest today was russian deputy minister because i'm a devout and that's opened up from all of us here spotlighted will be back with more comments on what's going on in and out that russia until then stay on r.t. and take a. good

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with max cons or for a no holds barred look at the global financial headlines to cause a report. before the wall could be minutes we have a lot of. groups of the colors of the sluices all i do's in the home or right in the my mouth it was like when you had that knowledge that wasn't. the smadi when i was ten yes you can liberate their women certainly can't do it through the barrel of a gun only effective social changes can be the afghans themselves afghan men and women we believe are going to start coming up to across. but. it's coming up on the shelf and construction. people in the obama administration talking about how much they care about the women of afghanistan it's not true they

don't care about the women of afghanistan.